TIDMPOS
RNS Number : 3244F
Plexus Holdings Plc
21 March 2022
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
equipment & services
21 March 2022
Plexus Holdings PLC
('Plexus', 'the Company' or 'the Group')
Interim Results for the 6 months to 31 December 2021
Plexus Holdings plc, the AIM quoted oil and gas engineering
services business and owner of the proprietary POS-GRIP(R) method
of wellhead engineering, announces its interim results for the six
months to 31 December 2021.
Financial Results
-- Continuing operations sales revenue GBP734k (2020: GBP419k)
-- Continuing operations EBITDA loss (GBP1,061k) (2020: GBP1,214k loss)
-- Continuing operations loss before tax (GBP1,953k) (2020: GBP1,995k loss)
-- Basic loss per share from continuing activities (1.94p) (2020: 1.99p loss)
-- Cash of GBP3.38m (2020: GBP3.38m), and GBP3.29m (2020:
GBP2.04m) drawn down from the Lombard banking facility
-- The Group has GBP4.71m in financial assets (2020: GBP3.04m)
-- Total assets of GBP26.3m (2020: GBP29.4m)
-- Total liabilities of GBP5.3m (2020: GBP3.9m)
Operational overview
-- July 2021 - received the London Stock Exchange's Green Economy Mark
o Awarded to companies and funds where 50% or more of their
revenues are attributable to environmental solutions which
contribute to the global green economy
o Recognition of Plexus' 'through the BOP' (Blow-out Preventer)
wellhead designs, as well as its POS-GRIP proprietary HG(R)
metal-to-metal leak proof sealing system
-- August 2021 - diversified future revenue stream by
re-entering the Jack-up Exploration (Adjustable) Rental Wellhead
market, through a collaboration agreement with Cameron
International Corporation ("Cameron"), a Schlumberger company
-- December 2021 - scope of surface production low-cost volume
wellhead licencing agreement with Cameron expanded worldwide
increasing the target market for Plexus' technology and royalty
rates for the expanded activities
o Terms and milestones of the previous agreement with Cameron
announced 10 November 2020 include:
-- Non-Exclusive Agreement enabling Cameron to design, market
and sell Plexus' POS-GRIP and HG metal-to-metal seal method of
wellhead engineering for surface wellheads to its existing
clients
-- Royalty payment in the range of 3% to 6% of the revenues
generated from the sale, lease, or rental of surface wellheads
-- Cameron design, testing and preparation of marketing material
underway and it is anticipated that sales activity will begin in
the first half of the next financial year
-- December 2021 - won a further contract with a leading North
Sea Operator for the provision of a Plexus' POS-GRIP 10,000 psi
leak proof "HG(R)" metal to metal sealing surface production
wellhead, together with associated spares and valve equipment
o Wellhead equipment on schedule for delivery by Q2 2022
-- Global concern about methane emissions continues to gather
momentum as part of the drive towards Net Zero and meeting ESG
goals, and Plexus believes that leak proof equipment with
scientifically proven long-term integrity will over time only
become more relevant to oil and gas exploration and production
activities
-- The war in Ukraine has resulted in the suspension of sales
and marketing activities in Russia with our licencee LLC Gusar
("Gusar") - further updates will follow as the tragic situation
unfolds. The suspension is not expected to have a material impact
on Plexus' financial trading performance in the year ending 30 June
("FY22") which the Board anticipates will remain in line with
market expectations
Chief Executive Ben van Bilderbeek said: "Despite another
challenging six months trading period in which COVID-19 continued
to impact on the global economy, there is now at least a clear sign
that the pandemic is beginning to subside, and although we must
still all be vigilant, the economy is returning to some sort of
normality. However, just as COVID recedes, what the world did not
anticipate post period end, was Russia waging war on Ukraine and
the ensuing tragic consequences that are ongoing; it is not yet
clear what this will mean for the world, the oil and gas industry
or our relationship with our Russian licensee Gusar where we have
suspended business activities for the foreseeable future.
"Notwithstanding these challenging circumstances, we are pleased
with our progress during the period both organically, with the
winning of a further surface production wellhead contract for the
North Sea, and strategically, with the strengthening of our
relationship with Cameron with the signing of two new agreements.
The first of these, signed in August enables Plexus to re-enter the
exploration rental wellhead market sector where we had built up an
excellent reputation within the industry over many years up until
2018 when the division was sold to TechnipFMC. The second agreement
signed in December, expanded the scope of the existing Cameron
license which now extends worldwide, whilst at the same time
increasing royalty rates for an expanded set of activities.
"The deployment of our proprietary wellhead and associated
equipment designs for surface and subsea applications remains a key
focus, and we are already pursuing a number of new tender
opportunities for exploration rental wellheads. Growing oil and gas
supply constraints, combined with gas being recognised as the
transition fuel of choice suggest that the UKCS and ECS still have
an important role to play over the coming decades. Indeed, the
Chancellor Rishi Sunak recently said that "We have resources in the
North Sea, and we want to encourage investment in that because
we're going to need natural gas as part of our transition to
getting to NetZero". The revitalised recognition of the role
hydrocarbons still have to play in the world economy has been
underlined by Oystein Noreng, professor of petroleum economics at
BI Norwegian School of Management in Oslo who has gone as far to
say We have misled ourselves that we will have windmills and solar
and that will be it. But globally we are not out of the coal age;
we are in the middle of the oil age and just starting the gas
age".
"In addition to these opportunities, we are also confident that
in the longer term our technology can play a crucial role in
supporting emerging industries such as carbon capture, gas storage,
hydrogen and geothermal. The unique combination of leak proof
performance and long-term integrity, which can avoid expensive
intervention and maintenance measures, is particularly important
for such applications.
"Moreover, in the last six months, the importance of aiming for
a net-zero future has never been more apparent, with the November
COP26 summit in Glasgow putting the spotlight on another
opportunity: decommissioning. Left unplugged, oil and gas wells are
at risk of leaking methane into the atmosphere, which currently
accounts for at least 25% of global warming. All of this indicates
that if natural gas is now viewed as a key transitional energy
source in the shift to a sustainable future, then exploration and
production methods must be conducted as responsibly as possible,
and that should mean that leak proof equipment of whatever nature
should be used whenever and wherever possible throughout the supply
chain.
"Despite opportunities finally emerging after an extended
industry downturn, we undoubtedly face obstacles: historically, the
industry has not been the most forward-thinking; project financing
is getting harder; funding in the decommissioning space has been
constrained; and as a small 'disruptive technology provider' we can
sometimes be regarded as an inconvenient and 'riskier' partner.
"However, I believe that the tide is now turning. New oil and
gas exploration and production drilling activities are increasing,
oil is back at record prices and meeting ESG requirements is no
longer optional, with regulation and investor sentiment becoming
ever more rigorous. If they are to survive, companies will also
need to explore alternative options to reach NetZero such as carbon
capture and storage and the use of depleted formations, and
geothermal power where Plexus is assessing ways in which its
technology can be adapted to deliver unique solutions. With
superior, leak-free technology at its core, escalating organic
opportunities, strengthening blue-chip partnerships, dynamic
R&D advances, our re-entering of the Jack-up exploration
wellhead rental business, and with ESG goals on the agenda of
governments worldwide, I am increasingly confident that Plexus has
reached a tipping point that positions us well to rebuild
significant value to shareholders over the next 18 months."
For further information please visit www.posgrip.com or
contact:
Ben van Bilderbeek Plexus Holdings PLC Tel: 020 7795 6890
Graham Stevens Plexus Holdings PLC Tel: 020 7795 6890
Derrick Lee Cenkos Securities PLC Tel: 0131 220 9100
Pete Lynch Cenkos Securities PLC Tel: 0131 220 9100
Max Bennett St Brides Partners Ltd Tel: 020 7236 1177
Isabel de Salis St Brides Partners Ltd Tel: 020 7236 1177
Chairman's Statement
Business Progress and Operating Review
"Plexus remains well-positioned to benefit from the
opportunities being created by the supply-demand deficit facing the
oil and gas industry. There is continued pressure for oil and gas
operators to increase production from existing wells whilst
improving their green credentials, and we believe this will have to
extend to increased exploration activity. A Shell presentation last
month titled "Shell LNG Outlook 2022" supports this view and warned
that an LNG supply-demand gap was set to emerge in the mid-2020s,
especially as many countries rebound from the economic impact of
the coronavirus pandemic. Shell's CEO van Beurden went as far to
say that "We are struggling as an industry to keep up with
supply.
"Evidence is building that the supply-demand deficit is
awakening investment activity by the large oil and gas exploration
and production companies, even before the war in Ukraine. Rystad
Energy analysts have reported that global oil and gas investment
will increase by $26bn this year to $628bn, and in the meantime
drilling rig use is climbing with some recent reports indicating a
circa 50% increase in North America and internationally. Eni head
Claudio Descalzi said the imbalance predated the pandemic and was a
result of falling investment since 2015, and it is now clear that
this needs to be addressed, especially for natural gas where Plexus
wellhead equipment and products excel.
"Plexus' wellheads, which have been used in over 400 gas wells
globally, are leakproof, deliver operational time savings, have
lower maintenance costs, and importantly, can significantly reduce
the escape of methane gas - increasing safety for personnel, and
limiting the negative impact on the environment. In recognition of
the Company's ongoing commitment to improving standards in the oil
and gas industry through the development and implementation of
innovative green technologies, on 21 July 2021, Plexus received the
London Stock Exchange's Green Economy Mark, an accolade awarded to
companies and funds where 50% or more of their revenues are
attributable to environmental solutions.
"On 9 August 2021, the Company announced that it was to re-enter
the Jack-up Exploration (Adjustable) Rental Wellhead market,
through a Co-operation Agreement with Cameron. Under the terms of
the Agreement, Cameron will licence and transfer Plexus' original
designed Exact-15 ("Exact") system rental wellhead inventory and
Centric-15 ("Centric") mudline system equipment, as well as provide
manufacturing support. Cameron will also assist Plexus with sales
leads generation and market insight through a formal Sales Advisory
Board. Plexus will contract directly with customers, manage the
full job execution cycle using its in-house field technicians and
infrastructure, and will assume responsibility for the maintenance,
repairs, and logistics of the equipment provided. Plexus will pay
Cameron a licence royalty fee based on revenue generated from the
sale and rental of the licenced equipment. This is an important
strategic move for Plexus and returns the Company to a business
sector it understands very well and in which it has a proven track
record.
"During the reporting period, the Company announced that it had
won a contract with a leading North Sea operator for the provision
of Plexus' POS-GRIP 10,000 psi leak-proof "HG" metal to metal
sealing surface production wellhead, together with associated
spares, and valve equipment. This is a cash generative, short-term
contract of 120 days, with a tiered payment structure, and
deliverable by Q2 2022. Plexus is pleased to report that this
contract will be delivered on time and with revenues as
anticipated."
Key functions that support our operations are Human Resources
('HR'), Quality Health and Safety ('QHSE'), Information Technology
('IT') and Intellectual Property (IP').
The Company maintains its Competency Management System through
an internally developed system 'Competency@Plexus' ('C@P'). This is
monitored and accredited by OPITO, the training and qualifications
standards board. The annual monitoring audit was successfully
conducted in September 2021, full accreditation was maintained with
no findings raised by the auditor.
QHSE is an important function of the Company and Plexus' strong
track record enables it to demonstrate a high degree of compliance
and credibility in the oil and gas industry. Without the
appropriate certifications, it would not be possible for Plexus to
be considered for certain contract awards by operators. With this
in mind, and with a commitment to provide a safe, practical, and
competent workplace for our employees, management has developed and
adopted very rigorous QHSE procedures in this field. In September
2021 the Company achieved six consecutive years of zero lost time
incidents ('LTIs') and, following successful audits, Plexus has
retained its API Q1 and ISO 45001 certifications.
The Group has continued to follow Government COVID-19
guidelines, with a gradual transition from working from home during
the pandemic towards a full time return to the office. Plexus has
been able to rely on robust IT and security systems to ensure that
neither work performance nor data security has been compromised
during this period.
We continue to develop our suite of IP both through patent
protection and ongoing research and development. Capitalised
R&D salary costs for the 6 months ended 31 December 2021 was
GBP223k.
Interim Results
Plexus' results for the six months to December 2021, and the
activities carried out during this period, reflect the Group's
ongoing strategy of moving towards the development of new revenue
streams and new markets.
Continuing operations revenue for the six-month period ended 31
December 2021 increased to GBP734k, compared to the previous year's
figure of GBP419k following an increase in operational
activity.
During the period Plexus continued to focus on preserving Group
cash by minimising spending, and controlling investment on capex,
opex and non-essential R&D, without compromising
operations.
Continuing activities administrative expenses have decreased for
the six months to December 2021 to GBP2.51m (2020: GBP2.64m).
Personnel numbers, including non-executive board members are
broadly in line with the prior year at 38 (2020: 36). This staff
structure has balanced the anticipation of ongoing and future
organic operational opportunities, particularly with the move back
into the rental wellhead exploration market, and development and
support for our POS-GRIP IP-led strategy involving external
partners and licensees, against the need to carefully manage the
Group's costs and cash resources. The current staff levels are
around the minimum required to maintain the operational
infrastructure that has been developed to date, including
maintaining the Group's Business Management System, and retaining
all relevant and necessary accreditations, in addition to meeting
operational requirements.
For continuing operations, the Group has reported a loss of
GBP2.0m in the period which is in line with the prior year. The
loss comes after absorbing depreciation and amortisation costs of
circa GBP0.8m.
The Group has not provided for a charge to UK Corporation Tax at
the prevailing rate of 19%. This is consistent with the prior
year.
Basic loss per share for continuing operations was 1.94p per
share which compares to a 1.99p loss per share for the same period
last year.
The balance sheet continues to remain strong, with the current
level of intangible and tangible property, plant and equipment
asset values at GBP9.4m and GBP2.8m respectively illustrating the
amount of cumulative investment that has been made in the business.
Total asset values at the end of the period stood at GBP26.3m.
As at 31 December 2021, the Group had cash and cash equivalents
of GBP3.4m, financial assets with a value of GBP4.7m and had drawn
down GBP3.3m on a Lombard banking facility provided by EFG.
Outlook
"It is now widely accepted that the transition to clean energies
will take several decades, with natural gas being recognised as the
key transitional hydrocarbon energy source. It is hard to believe
that mid-pandemic in 2020, demand for oil plummeted and traders
were paying buyers to take storage of oil, and that Brent crude was
trading at US$23, a historical low. At the same time global oil and
gas investments fell from US$780 billion in 2019 to US$680 billion.
Moving to the present, as economies recover post pandemic, global
energy demand together with uncertainties surrounding established
supply sources has resulted in huge price increases particularly in
relation to gas. In the UK gas prices have for practically two
decades traded around 50p per therm and lower, and this month,
magnified by the Ukraine crisis gas briefly hit over 550p per
therm.
"At the same time, the oil price shot up earlier this month to
circa US$139 a barrel before settling closer to $100. In response
to this growing demand, and the need for the West to diversify its
strategic supply sources, both oil and gas investments are showing
signs of a strong recovery for example in terms of growing rig
utilisation, and this will translate into more activity for oil
services companies. Importantly, natural gas is likely to be used
for a longer period as a transition fuel while renewable energies
mature technologically and economically. This endorsement was
underlined by the BBC in a report in early February, confirming
that the European Commission had decided to classify gas as a
'sustainable investment' if it meets certain targets.
"Perhaps none of this should be such a surprise in a world where
fossil fuels combined make up 83% of the energy mix, and oil and
gas alone account for 56%. These are fast declining assets once
they are producing, and our industry needs to invest enough to
offset the 5m to 6m barrels per day ('b/d') normal rate of decline.
Hardly a surprise therefore that Opec said earlier in the year that
demand for its oil in 2022 will be about 1mn b/d higher than last
year, and that longer term Opec sees current global demand of 100m
b/d rising to 108m b/d, or 28 per cent of energy requirements by
2045. It would appear that a combination of an over assumption that
a COVID 'shackled' global economy was pointing to ongoing lower
energy use, combined with an 'overshoot' of green initiatives
resulting in a sharp pivot away from hydrocarbons has all conspired
to create energy supply constraints that perhaps should have been
better anticipated.
"The upshot of all this is that despite current aspirations,
hydrocarbons have a role to play in the transition to NetZero and
are likely to remain an important part of the world's energy mix
for much longer than some pundits had predicted. These challenges
have of course been sadly magnified by the war in Ukraine, and the
realisation that Europe's dependence on Russian oil and gas is not
strategically sensible or acceptable. For oil services companies
such developments point to a better future than many would liked to
have believed, and is evidenced by a recent green light given by
the Government for six North Sea oil and gas projects to proceed
later this year. Further, the Prime Minister has just announced the
setting up of an energy task force headed up by two industry
experts to boost the UK's oil and gas supplies which will include
the North Sea.
"There will still however rightly be a push for operators to be
greener, safer and to use technology to optimise wells and reduce
harmful emissions. Perhaps, it is unsurprising that the USA has led
the clean agenda by pledging US$1.15 billion to clean up orphaned
oil and gas wells, and we are hopeful that other countries will
follow suit, although Plexus has always maintained that the
prevention of such environmental issues is far better than supposed
cures which are not guaranteed, especially for the long term. A key
backdrop to these developments is that Plexus owns an extensive IP
suite which has and will continue to deliver innovative solutions
for the oil and gas industry, and which can also involve
retrofitting of bespoke equipment. This has been recognised by our
licensees, and we will be doing everything we can to capitalise on
this important asset.
"In summary, Plexus believes it will benefit from strong market
drivers across the oil and gas industry, including the demand for
oil and gas being likely to outstrip supply for some time. This,
coupled with the recognition that gas will continue to play a key
transitional role in the provision of sustainable green energy
makes us optimistic about the future as drilling activities gain a
new momentum."
J Jeffrey Thrall
Non-Executive Chairman
18 March 2022
Plexus Holdings Plc
Unaudited Interim Consolidated Statement of Comprehensive
Income
For the Six Months Ended 31 December 2021
Six months Six months Year to
to to 30 June
31 December 31 December 2021
2021 2020
GBP'000 GBP'000 GBP'000
Revenue 734 419 2,017
Cost of sales (130) (36) (1,062)
------- ------- -------
Gross profit 604 383 955
Administrative expenses (2,512) (2,641) (5,501)
Operating loss (1,908) (2,258) (4,546)
Finance income 81 106 143
Finance costs (159) (40) (103)
Other income 11 180 211
Share in profit of associate 22 17 (77)
------- ------- -------
Loss before taxation (1,953) (1,995) (4,372)
Income tax credit (note 6) - - 262
------- ------- -------
Loss after taxation from continuing
operations (1,953) (1,995) (4,110)
Loss after taxation from discontinued
operations - - (392)
------- ------- -------
Loss for Year (1,953) (1,995) (4,502)
Other comprehensive income - - -
------- ------- -------
Total comprehensive income (1,953) (1,995) (4,502)
------- ------- -------
Loss per share (note 7)
Basic from continuing operations (1.94p) (1.99p) (4.09p)
Diluted from continuing operations (1.94p) (1.99p) (4.09p)
Basic from discontinued operations - - (0.39p)
Diluted from discontinued operations - - (0.39p)
Plexus Holdings PLC
Unaudited Interim Consolidated Statement of Financial
Position
As at 31 December 2021
31 December 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
ASSETS
Goodwill 767 767 767
Intangible assets 9,435 9,920 9,644
Property, plant and equipment
(note 9) 2,798 3,076 2,961
Non-current financial asset 4,705 3,044 3,042
Investment in associate 743 865 721
Deferred tax asset 1,899 2,130 1,899
Other Receivables - - -
Right of use asset 1,093 1,397 1,245
------- ------- -------
Total non-current assets 21,440 21,199 20,279
------- ------- -------
Inventories 663 1,385 575
Trade and other receivables 852 3,396 1,051
Current income tax asset - - -
Cash and cash equivalents 3,379 3,384 5,175
------- ------- -------
Total current assets 4,894 8,165 6,801
------- ------- -------
TOTAL ASSETS 26,334 29,364 27,080
------- ------- -------
EQUITY AND LIABILITIES
Called up share capital (note
12) 1,054 1,054 1,054
Shares held in treasury (2,500) (2,500) (2,500)
Share based payments reserve 674 674 674
Retained earnings 21,811 26,271 23,764
To tal equity attributable ------- ------- -------
to equity holders
of the parent 21,039 25,499 22,992
Lease liabilities 1,015 1,220 1,085
------- ------- -------
Total non-current liabilities 1,015 1,220 1,085
Trade and other payables 670 1,239 643
Bank Lombard facility 3,294 1,094 2,044
Current income tax liability - - -
Lease liabilities 316 312 316
------- ------- -------
Total current liabilities 4,280 2,645 3,003
------- ------- -------
Total liabilities 5,295 3,865 4,085
------- ------- -------
TOTAL EQUITY AND LIABILITIES 26,334 29,364 27,080
------- ------- -------
Plexus Holdings Plc
Unaudited Interim Statement of Change in Equity
For the Six Months Ended 31 December 2021
Called Shares Share Based Retained Total
Up Held in Payments Earnings
Share Capital Treasury Reserve
Balance as at 30 June
2020 1,054 (2,500) 674 28,266 27,494
Total comprehensive
income for the year - - - (4,502) (4,502)
------- ------- ------- ------ ------
Balance as at 30 June
2021 1,054 (2,500) 674 23,764 22,992
Total comprehensive
income for the period - - - (1,953) (1,953)
------- ------- ------- ------- -------
Balance as at 31 December
2021 1,054 (2,500) 674 21,811 21,039
------- ------- ------- ------- -------
Plexus Holdings Plc
Unaudited Interim Statement of Cash Flows
For the Six months ended 31 December 2021
Six months
to 31 December Six months Year to
2021 to 31 December 30 June
2020 2021
GBP 000's GBP 000's GBP 000's
Cash flows from operating activities
Loss before taxation from continuing
activities (1,953) (1,995) (4,372)
Loss before taxation from discontinued
activities - - 20
------- ------- -------
Loss before tax (1,953) (1,995) (4,352)
Adjustments for:
Depreciation, amortisation and
impairment charges 838 864 1,701
Gain on disposal of property,
plant and equipment (1) (1) (1)
Fair value adjustment of on financial
assets 112 (41) 19
Lease liability re-assessment - - 25
Share in (profit) / loss of associate (22) (17) 77
Other income (11) (180) (123)
Investment income (81) (65) (143)
Interest expense 47 40 84
Changes in working capital:
(Increase) / decrease in inventories (88) (515) 295
Decrease / (increase) in trade
and other receivables 199 (414) (255)
Increase / (decrease) in trade
and other payables 27 461 (135)
------- ------- -------
Cash used in operating activities (933) (1,863) (2,808)
Net income taxes received - 76 157
------- ------- -------
Net cash used in operating activities (933) (1,787) (2,651)
------- ------- -------
Cash flows from investing activities
Funds invested in financial instruments (1,775) (8) (66)
Other income 11 180 123
Dividend received from associate - 50 100
Purchase of intangible assets (252) (53) (235)
Deferred proceeds from sale of
discontinued operation - - 2,186
Interest and investment income
received 81 65 143
Purchase of property, plant and
equipment (62) (58) (170)
Net proceeds from of sale of property,
plant and equipment 2 1 1
------- ------- -------
Net cash (used) / generated from
investing activities (1,995) 177 2,082
------- ------- -------
Plexus Holdings Plc
Unaudited Interim Statement of Cash Flows (continued)
For the Six months ended 31 December 2021
Cash flows from financing activities
Drawdown of banking facility 1,250 1,094 2,044
Repayments of lease liability (87) (147) (342)
Interest paid (31) (40) (45)
------- ------- -------
Net cash inflow / (outflow) from
financing activities 1,132 907 1,657
------- ------- -------
Net decrease in cash and cash
equivalents (1,796) (703) 1,088
Cash and cash equivalents at
brought forward 5,175 4,087 4,087
------- ------- -------
Cash and cash equivalents carried
forward 3,379 3,384 5,175
------- ------- -------
Notes to the Interim Report December 2021
1. This interim financial information does not constitute
statutory accounts as defined in section 435 of the Companies Act
2006 and is unaudited.
The comparative figures for the financial year ended 30 June
2021 are not the Company's statutory accounts for that financial
year. Those accounts have been reported on by the company's
auditors, Crowe U.K. LLP, and delivered to the registrar of
companies. The report of the auditors was (i) unqualified, (ii) did
not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498(2) or (3) of
the Companies Act 2006.
The interim financial information is compliant with IAS 34 -
Interim Financial Reporting.
The accounting policies are based on current International
Financial Reporting Standards ("IFRS"), International Financial
Reporting Interpretation Committee ("IFRIC") interpretations and
current International Accounting Standards Board ("IASB") exposure
drafts that are expected to be issued as final standards and
adopted by the EU such that they are effective for the year ending
30 June 2022. These standards are subject to on-going review and
endorsement by the EU and further IFRIC interpretations and may
therefore be subject to change.
2. Except as described below the accounting policies applied in
these interim financial statements are the same as those applied in
the Group's consolidated financial statements as at and for the
year ended 30 June 2021 and which are also expected to apply for 30
June 2022.
The changes in accounting policy set out below will also be
reflected in the Group's consolidated financial statements for the
year ending 30 June 2022.
Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and IFRS 16
A number of other amendments to standards not yet endorsed
include:
-- Classification of liabilities as current or non-current (Amendments to IAS 1)
-- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
-- Definition of Accounting Estimate (Amendments to IAS 8)
-- Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)
The Directors have considered those standards, amendments and
interpretations, which have not been applied in the financial
statements but are relevant to the Group's operations, that are in
issue but not yet effective and do not consider that they will have
a material impact on the future results of the Group.
3. This interim report was approved by the board of directors on
18 March 2022.
4. The directors do not recommend payment of an interim dividend
in relation to this reporting period.
5. There were no other gains or losses to be recognised in the
financial period other than those reflected in the Statement of
Comprehensive Income.
6. No corporation tax provision has been provided for the six
months ended 31 December 2021 (2020: nil). As a result, there is no
effective rate of tax for the six months ended 31 December 2021
(2020: 0%).
7. Basic earnings per share are based on the weighted average of
ordinary shares in issue during the half-year of 100,435,744 (2020:
100,435,744).
8. The Group derives revenue from the sale of its POS-GRIP
friction-grip technology and associated products, and licence
income derived from its various licensing agreements. These income
streams are all derived from the utilisation of the technology
which the Group believes is its only segment. Business activity is
not subject to seasonal fluctuations.
9. Property plant and equipment
Buildings Tenant Equipment Assets Motor Total
GBP000 Improvements GBP000 under construction vehicles GBP000
GBP000 GBP000 GBP000
Cost
As at 30 June
2020 3,740 714 5,393 - 17 9,864
Additions - - 42 128 - 170
Transfers - - 128 (128) - -
Disposals - - (2) - - (2)
----- ----- ----- ----- ----- -----
As at 30 June
2021 3,740 714 5,561 - 17 10,032
Additions - - 43 19 - 62
Transfers - - 19 (19) - -
Disposals - - - - - -
----- ----- ----- ----- ----- -----
As at 31 December
2021 3,740 714 5,623 - 17 10,094
----- ----- ----- ----- ----- -----
Depreciation
As at 30 June
2020 1,490 525 4,569 - 7 6,591
Charge for
the year 153 41 284 - 4 482
On disposals - - (2) - - (2)
----- ----- ----- ----- ----- -----
As at 30 June
2021 1,643 566 4,851 - 11 7,071
Charge for
the year 76 17 130 - 2 225
On disposals - - - - - -
----- ----- ----- ----- ----- -----
As at 31 December
2021 1,719 583 4,981 - 13 7,296
----- ----- ----- ----- ----- -----
Net book value
As at 31 December
2021 2,021 131 642 - 4 2,798
----- ----- ----- ----- ----- -----
As at 30 June
2021 2,097 148 710 - 6 2,961
----- ----- ----- ----- ----- -----
10. Investments
GBP'000
Investment in associate at 30 June
2020 898
Share of profit for the period (77)
Dividends received (100)
-----
Investment in associate at 30 June
2021 721
Share of profit for the period 22
-----
Investment in associate at 31 December
2021 743
-----
On 14 December 2018 Plexus Ocean Systems Limited acquired a 49%
interest in Kincardine Manufacturing Services Limited ('KMS') for a
consideration of GBP735k plus associated legal fees. KMS is a
precision engineering company which serves the oil and gas
industry. This is viewed as a long-term strategic investment by
Plexus. KMS is based at Sky House, Spurryhillock Industrial Estate,
Stonehaven, Aberdeenshire AB39 2NH.
Following the investment Graham Stevens, Plexus' Finance
Director was appointed to the board of KMS. The company remains
under the control and influence of the 51% majority
shareholders.
The summary financial information of KMS, extracted on a 100%
basis from the accounts for the year to 31 December 2021 is as
follows:
2021
GBP'000
Assets 2,747
Liabilities 1,802
Revenue 2,819
Loss after tax (143)
11. Discontinued operations
Six months Six months Year to
to 31 December to 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
Revenue - - -
Expenses - - 20
(Loss)/Profit before tax of discontinued
operations - - 20
I ncome tax credit - - (412)
(Loss)/Profit after tax of discontinued
operations - - (392)
12. Share Capital
Six months Six months Year to
to 31 December to 30 June
2021 31 December 2021
2020
GBP'000 GBP'000 GBP'000
Authorised:
Equity: 110,000,000 (June 2021
& Dec 2020: 110,000,000) Ordinary
shares of 1p each 1,100 1,100 1,100
Allotted, called up and fully ----- ----- -----
paid:
Equity: 105,386,239 (June 2021
& Dec 2020: 105,386,239) 1,054 1,054 1,054
----- ----- -----
Notes
Plexus Holdings plc (AIM: POS) is an IP led company focussed on
establishing its patented leak-proof POS-GRIP(R) wellhead and
associated equipment as the go-to technology for energy markets
whilst making a genuine contribution to the oil and gas industry's
ESG and NetZero goals by championing "through the BOP" (Blow-out
Preventer) designs, and lifetime leak-proof HG(R) metal-to-metal
sealing systems. Having protected the environment for many years
through these technological innovations, the Company was awarded
the London Stock Exchange's Green Economy Mark in July 2021 and
continues to place emphasis on its ability to reduce harmful
methane emissions and unnecessary maintenance and intervention
costs.
Headquartered in Aberdeen, the Company has provided leak-free
wellhead performance in over 400 wells worldwide and worked with an
array of blue-chip oil and gas company clients. As well as
generating direct revenues from securing orders for surface
production wellheads particularly in the UK and European North Sea
regions, the Company has several licencing/collaboration agreements
with major partners including FMC Technologies, which is a
subsidiary of TechnipFMC, and LLC Gusar in Russia. Furthermore, it
works closely with Cameron, a Schlumberger Group company Cameron
has a non-exclusive licence to use the POS-GRIP and HG(R)
metal-to-metal seal method of wellhead engineering for the
development of conventional and unconventional oil and gas surface
wellheads, and Plexus entered into a Cooperation Agreement, which
enabled Plexus to return to the Jack-up Exploration (Adjustable)
Wellhead rental business for 'through the BOP' jack-up
applications, where Cameron will help to provide Plexus with sales
leads and market insight through a formal Sales Advisory Board.
Plexus' current suite of products and applications include: "HG"
wellheads, which combine POS-GRIP technology with gas tight leak
free metal-to-metal sealing; the Python(R) subsea wellhead,
developed in a Joint Industry Project with several industry
leaders; the POS-SET(TM) Connector for the de-commissioning and
abandonment market; and Tersus-PCT, an innovative HP/HT tie back
connector product. Having proved the superior uniquely enabling
qualities of POS-GRIP Technology, Plexus is now also focused on
establishing its technology and equipment in other markets such as
Plug and Abandonment de-commissioning, carbon capture, gas storage,
hydrogen and geothermal where it can play an important role in
reducing harmful methane emission risks as operators strive to
deliver on ESG commitments and NetZero goals in a safe and
cost-effective way.
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END
IR ZVLFFLXLLBBV
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March 21, 2022 03:00 ET (07:00 GMT)
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